Modernizing Kazakhstan’s energy and utility infrastructure is about far more than replacing pipes and power lines. By 2029, the program is expected to generate nearly KZT 2 trillion in demand for domestically produced goods, with factories set to receive orders worth more than KZT 900 billion for materials and equipment over the next two years alone. Officials from the Ministry of Industry and Construction outlined the plans at a government meeting, explaining that the national project Modernization of the Energy and Utility Sectors is effectively creating one of the country’s largest industrial procurement programs. It simply happens to be packaged as infrastructure renewal rather than industrial policy.
The demand is clearly mapped across sectors. Electricity infrastructure accounts for the largest share, with procurement worth KZT 341.6 billion. Another KZT 232 billion will go to district heating projects, KZT 197.5 billion to water supply, and KZT 177.8 billion to wastewater systems. The purchases include pipes, cables, valves, reinforced concrete products, and other equipment already manufactured by Kazakh producers. In other words, the objective is not to build entirely new factories, but to keep existing industrial capacity fully utilized through long-term public procurement.
To ensure this demand benefits domestic manufacturers rather than imports, procurement under the national project is conducted through a dedicated electronic platform that gives priority to locally produced goods. The registry already includes around 500 enterprises supplying more than 14,000 product categories, effectively creating a ready-made supplier base directly linked to government infrastructure spending. The mechanism is already operational. Initial procurement has been completed for the reconstruction of district heating networks in Semey and the construction of a new heating main in Ekibastuz.
The infrastructure program itself is also expanding rapidly. In 2026, Kazakhstan plans to almost double the volume of engineering network repairs from 6,600 kilometers to 12,000 kilometers, supported by KZT 1.138 trillion in funding. Of that amount, KZT 759 billion will finance construction works directly, while KZT 379 billion will be allocated to projects where EPC contractors have already been appointed and procurement from domestic manufacturers is taking place in parallel. Deputy Minister of National Economy Asan Darbayev presented these figures during the government meeting. By comparison, KZT 547 billion was allocated in 2025 to repair 6,600 kilometers of infrastructure. Budget growth is therefore outpacing the physical increase in construction activity, with much of the additional spending translating directly into industrial orders.
The investment is not only about expanding infrastructure. It is also designed to reduce systemic risk. By 2029, the government plans to remove 70 utility companies from the high-risk category, referring to operators where aging networks and equipment pose a direct threat to reliable electricity, heating, and water services. Eight regulated utilities left this high-risk category in 2025, with another eight scheduled for 2026. Altogether, the national project covers 247 regulated utility operators, and every modernization project required to move a company out of the risk zone creates additional demand for equipment supplied by the same network of approximately 500 domestic manufacturers.
The same logic underpins the wastewater treatment modernization program. It includes 45 construction and reconstruction projects worth more than KZT 800 billion, targeting facilities where average asset depreciation exceeds 65% and some infrastructure has been operating for more than half a century. Five projects have already been completed, while another three – in Atyrau, Kyzylorda, and Karazhal – are scheduled for completion by the end of 2026. Beyond improving environmental performance and wastewater reliability, these projects represent another major source of demand for construction materials and industrial equipment procured through the same electronic platform.
To ensure funding reaches construction sites without unnecessary administrative delays, Deputy Prime Minister Kanat Bozumbayev, who oversees the national project, instructed regional governments to closely monitor all 2026 projects while preparing the 2027 pipeline in advance to avoid losing valuable construction time to procurement procedures. He also instructed ministries and regional authorities to assess metering requirements across every region and approve a nationwide installation plan through 2029.
“Without comprehensive metering of water, heat, and electricity consumption, it will be impossible to fully digitalize the utilities sector,”
Bozumbayev said.
That means smart meters themselves become another component of the growing procurement pipeline destined for Kazakhstan’s manufacturers.
On paper, this is an infrastructure rehabilitation program. In financial terms, however, it has become one of Kazakhstan’s largest industrial demand programs, backed by multi-year funding, a dedicated supplier registry, and an operational procurement mechanism. The key question over the coming years is whether Kazakhstan’s manufacturing sector can expand production quickly enough to meet demand before the government is ready to place the next wave of orders.
This article was translated with the assistance of artificial intelligence.
